2
Section
Words to Know
by a group of investors
corporation
a large company formed
monopoly
the complete control of an industry by one company
or person
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Ifre changes brought
about by inventions and industry
allowed some businesses to grow very large. As businesses
grew, they often bought smaller companies in the same
industry. As a result, ownets of these businesses grew
very rich.
Power and Wealth
Until the late 1800s, most businesses were small.
Usually there was one owner and a few employees.
However, in the last half of the 1800s, business leaders
changed the way businesses worked.
One business that grew was the Singer Sewing
Machine Company. It had several factories and
thousands of workers who made more than one
million sewing machines ayear. Companies in the
railroad, steel, and oil industries were even bigger. The
new companies became corporations. A corporation is
a large company formed by a group of investors.
This is an advertisement
for a Singer sewing
t machine.
Business leaders who ran the largest corporations
were men of great power. Many people disliked the
rich business owners. They felt that the owners had
become rich because of the work of low-paid workers.
They called the owners "robber batons."
How did many small businesses change in the
late 18OOs?
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Unit4.AGrowingNation
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Leaders of Big Business
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Two of the richest and most powerful business
in the 1800s controlled the two most
important businesses in the United States. Andrew
Carnegie controlled most of the steel industry. John D.
Rockefeller controlled the oil industry. Both men
came up with new ways of making money.
leaders
Many people admired Carnegie and Rockefeller for
their success. However, many people who believed that
the men's success had come unfairly disliked them.
Andrew Carnegie
When the steel industry was iust getting started,
Andrew Carnegie built a big steel mill outside of
Pittsburgh, Pennsylvania. He had complete control
over the cost of making steel. He did not have to pay
mining companies, railroads, or shippers to bring
supplies to his mills. That was because he owned all
the companies that took part in making steel. By the
1890s, Carnegie had many steel mills.
A Closer Look
CAPITAL AND STOCKS
As corporations become larger, they need larger
amounts of capital. Capital is money used to run a
business. To get the money, many companies sell
stock. A stock is a share, or part, of the ownership
of a company. People who buy stocks are called
stockholders. They have a right to share in the
money a corporation makes. They also have the right
to vote for a group of leaders'to run the corporation.
Critical Thinking How might stockholders feel about
a wealthy, powerful person running the corporation
in which they hold stock?
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Stockholders own stock
certificates, like this one.
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Chapterl3. The Growth of lndustry.
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1860-1900
241
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John D. Rockefeller
By the late 1800s, John D. Rockefeller controlled
almost the entire oil industry in the United States.
Rockefeller named his business the Standard Oil
Company.
Rockefeller ran his company by paying close
attention to every part of his business. He bought the
rights to oil from oil wells drilled by others. He also
bought forests for timber to build oil barrels. He even
bought ships to carry oil around the world. When he
retired, Rockefeller was worth more than $L billion.
Oiltaken from oilwells
was used to make fuel
for stoves and lamps.
What industries did Andrew Carnegie andJohn D.
Rockefeller control?
Big Business Grows
For most of the nation's history, Americans wanted
government to leave businesses alone. They believed
that companies, farms, and factories should be free to
make as much money as possible.
Many business leaders in the late 1800s believed
that the success of industry meant more jobs for more
people. Because many business leaders were wealthy
and powerful, lawmakers left industry alone. When
businesses continued to grow larger and larger, some
Americans became worried. They thought that the
government should control big business.
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Farmers asked for government action. They
complained that they had to pay high costs to ship
their goods to markets. However, a wealthy business
person like Rockefeller paid less to ship oil on rail
lines. Rockefeller could force railroad owners to lower
their prices. Farmers could not.
Why did farmers want the government to control
big businesses?
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Unit4.AGrowi ngrNation
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Gontrolling Big Business
Some people were unhappy when a big business
became a monopoly. A monopoly is the complete
control of an industry by one company or person.
For example, Rockefeller had a monopoly on the oil
industry. A powerful monopoly could control prices;
In the late 1-88Os, U.S. lawmakers took some steps
to control big business. Here are some of the laws that
Congress passed.
L. Railroads that traveled through several states
had to set prices that were fair to everyone.
2. Railroads had to make the prices they charged
public so that everyone would know how much
they charged.
3. Large companies could not interfere with the
business of smaller companies.
Many people agreed with the ideas behind the new
laws. However, making the laws work against wealthy
and powerful business leaders was difficult.
pr"* did the government try to control big business?
Seation 2 Review
1. Why did some people call rich, powerful
businessmen "robber barons"?
2.How did John D. Rockefeller run his business?
3. Critical Thinking Do you think big business
helps or hurts industries? Explain.
4. Write About Economics You are a farmer about
to speak to lawmakers. Write a short speech
giving your opinion of monopolies.
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Chapter 13 . The Grovvth of lndustry .
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1860-19q)
243
VOICES FROM THE PAST
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Andrew Carnegie
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Andrew Carnegie was born in Scotland in 1835.
When he was 12, his family moved to the United
States. They settled near Pittsburgh, Pennsylvania.
By the time he was 30, Carnegie was a millionaire.
In "How I Served My Apprenticeship," Carnegie
describes his first job.
"My father entered a cotton factory. I soon
followed, and served as a'bobbin-boy' . . .
For a lad of twelve to rise and [eat] breakfast
every morning, except the blessed Sunday
morning, and go into the streets and find his way
to the factory and begin work while it was still
dark outside, and not be released until after
darkness came again in the evening, [with a] forty
minutes' þreak] only being allowed at noon, was
a teirible task.
Andrew Carnegie
But I was young and had my dreams, and something
within [me] always told me that this would not, could not,
should not last-I should some day get into a better
position. Besides this, I felt myself no longer a mere boy,
but quite a little man, and this made me happy."
1. What was Carnegie's first job?
2. How did Carnegie describe his walk to work?
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CHALLENGE What advice do you think Camegie
might have given to a young worker at his steel
company?
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